The market data undermines one of the Biden administration's central justifications for suspending new approvals for liquefied natural gas (LNG) export terminals.
The administration is roll out or amplified Some arguments in favor of suspending LNG terminal approvals. suggestion Expansion of LNG exports is expected to put upward pressure on domestic natural gas prices. However, market data does not currently support this claim, and energy sector experts told the Daily Caller News Foundation that the claim does not hold water.
“There is no evidence that LNG exports have had any effect on domestic natural gas prices, other than perhaps pushing prices down,” said the 40-year veteran of the oil and gas industry, who now works in the energy sector. David Blackmon, a consultant and author, said: he told DCNF. “As exports from the US to Europe increase in late 2022, NYMEX Henry Hub domestic prices have plummeted from $7 per million British thermal units to just $2 in just four months.”
The U.S. Energy Information Administration (EIA) issued the following report in May 2023: report We predict that an increase in LNG exports will put upward pressure on domestic prices, while a decline in exports will have the opposite effect.However, EIA is different data Domestic natural gas prices in 2023 show a significant decline compared to the previous year, the same period as U.S. LNG exports. reached Achieved record levels and made America number one in the world take the lead LNG exporter. (Related: Biden's natural gas moratorium will increase emissions and empower foreign producers, experts say)
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“This administration is committed to affordable energy and economic opportunity for all Americans. Strengthening energy security here in the United States and with our allies. Department of Energy Secretary Jennifer Granholm said on January 26, the day the suspension was announced. [the Department of Energy] We continue to be a responsible actor by leveraging the latest economic and environmental analysis. ”
The climate-related impacts of a significant expansion of U.S. LNG export capacity will be received pretty Note The administration's focus on energy affordability is also a key motivator for the moratorium, as reported by news outlets, as Granholm said in a statement. President Joe Biden's chief energy adviser, Amos Hochstein, suggested Thursday that the United States may already have more than enough operational LNG export capacity.
“What this moratorium decision has actually accomplished is to dry up investment funding for future natural gas projects and hand over the keys to Qatar,” Dan Kish, a senior fellow at the Energy Institute, told DCNF. Told. “Would you please stop exporting food to bring down food prices?”
Kish also pointed out that natural gas-related technology has developed significantly since the dawn of the century.shale revolutionIn the 2000s. Mr. Kish told the DCNF that companies can gain greater access to the U.S.'s vast natural gas reserves and create more efficient systems to maintain sufficient supply at competitive prices to meet domestic and global demand. There is no question that we will continue to develop effective, robust and effective technology.
Additionally, White House Climate Change Secretary Ali Zaidi said in January that the global demand for U.S. LNG, particularly in Europe, will increase as most European allies pursue a transition to green energy in the coming years. suggested that demand may be temporary.
Many of America's allies in Europe are committed to a green energy future, but some of those same countries natural gas power plant and LNG import base To complement American export terminals. In Europe, the gap between long-term supplies of contracted LNG and its needs is widening. according to This is reflected in the market analysis conducted by Rystad Energy.
Furthermore, government officials euro gasThe Oil and Gas Trade Association, which represents 102 European companies, wrote: letter Before making the decision, it warned that suspending new export approvals in the US “risks widening and prolonging global supply imbalances.”
In Asia, prospective LNG buyers such as Japan and China are seeking alternative supply arrangements to protect themselves from disruption caused by the US moratorium on new export hubs. according to Go to Bloomberg News. In February, Qatari authorities announced additional long-term increases in natural gas production, strengthening existing growth plans and putting the country on track to increase production capacity by 85% by the end of the decade. Notably, Qatar has signed two major long-term agreements with China for natural gas supplies in the past 18 months.
Neither the White House nor the Department of Energy immediately responded to requests for comment.
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